The Rada recommends exempting imported cars for the military from VAT, excise and customs duties

The Chairman of the Tax Committee Danylo Hetmantsev said that on March 15, 2024, the Verkhovna Rada Committee on Taxation and Customs Policy recommended the adoption in the first reading of

• No. 10219 - on amendments to Section XXI "Final and Transitional Provisions" of the Customs Code of Ukraine and other laws of Ukraine;
• No.10220 - on amendments to subsection 10 of section XX "Transitional Provisions" of the Tax Code of Ukraine.

According to the cards of these documents, the purpose of these draft laws is to introduce short-term incentive tax and customs benefits to assist local governments in providing the security and defense forces with a sufficient number of vehicles.

Thus, it is proposed to provide that temporarily, until December 31, 2024 , the following transactions on importation of vehicles classified under the following headings into the customs territory of Ukraine are exempt from VAT and excise tax, as well as import duty

• 8701,
• 8702 (motor vehicles designed to carry 10 persons or more, including the driver, except for trolleybuses),
• 8703 (passenger cars and other vehicles, other than passenger cars with a body type: sedan, hatchback, convertible, coupe; racing cars; vehicles classified in subheading 8703.10)
• 8704,
• 8705 (motor vehicles for special purposes, except for drilling machines, concrete mixers),
• 8716 according to UKTZED, except for vehicles that are subject to taxation in accordance with subparagraph 267.2.1 of the TCU, which are imported into the customs territory of Ukraine by enterprises, institutions and organizations established by local self-government bodies and paid for at the expense of local budgets in accordance with the procedure established by the Budget Code of Ukraine for their further free of charge (without any monetary, material or other types of compensation) transfer by such persons to the Armed Forces of Ukraine, volunteer formations of territorial communities, the National Guard of Ukraine, the Security Service of Ukraine, the Foreign Intelligence Service of Ukraine, the State Border Guard Service of Ukraine, etc.

In addition, it is envisaged that such vehicles should be transferred to the recipients no later than 45 calendar days from the date of completion of customs clearance of such vehicles on the basis of acceptance certificates/documents. Copies of the documents on acceptance and transfer of these vehicles must be submitted to the customs authority that carried out their customs clearance within 30 days from the date of execution of such documents.

In case of violation of the deadline or misuse of these vehicles, the taxpayer will be obliged to pay the amount of value added tax and excise tax that should have been paid upon importation of such vehicles into the customs territory of Ukraine, as well as pay a penalty in accordance with the law.

In addition, Draft Law No. 10219 amends the Law "On Certain Issues of Importation into the Customs Territory of Ukraine and First State Registration of Vehicles" to establish that such vehicles will not be subject to the requirements for their compliance with environmental standards established by this Law during customs clearance for free circulation and first state registration in Ukraine, and the Law of Ukraine "On Road Traffic" to extend the permission to use such vehicles in road traffic to